Which of the Following Statements Concerning Ideal Standards Is Incorrect

question 138

Multiple Choice

Which of the following statements concerning ideal standards is incorrect?

• A)Ideal standards generally do not provide the best motivation for workers.
• B)Ideal standards do not make allowances for waste,spoilage,and machine breakdowns.
• C)Ideal standards are better suited for cash budgeting than practical standards.
• D)Ideal standards may be better than practical standards when managers seek continual improvement.

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Definitions:

Indirect Method

An accounting practice used to prepare the cash flow statement, where net income is adjusted for non-cash transactions and changes in working capital to calculate cash flow from operating activities.

Net Income

The total revenue minus total expenses, representing the company's profit.

Operating Activities

These are the primary day-to-day activities of a business that relate to its production, sales, and deliveries of its products and services.

Prepaid Insurance

An asset account that represents the amount paid for insurance coverage in advance of the service period.